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Tag Archives: chapter 7 bankruptcy

What Kind of Unusual Assets Are Exempt in a Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy essentially eliminates debt for the filer but requires liquidation of assets. In other words, federal law dictates that most of what the filer owns must be sold off to pay creditors some fraction of what is owed. Even though the net value of these assets may not meet all debts, the… Read More »

What Role do Creditors Play in Bankruptcy?

Depending on the type of bankruptcy proceeding, creditors can have numerous rights. While bankruptcy automatically stays must collection activities, certain creditors may play an active role in the bankruptcy process. These creditors — whom the petitioner must list in his or her bankruptcy petition — must receive notice of the filing. Under Chapter 7, creditors… Read More »

What Kind of Assets Can You Keep after Liquidation?

Filing for bankruptcy is a big decision and people frequently have concerns about how it will affect their assets and credit, especially in the case of Chapter 7 liquidation bankruptcy. Many people believe that when they file for Chapter 7, they must give up everything they own in order to receive a discharge. But that… Read More »

Long-Term Effects of Bankruptcy

We spend a lot of time here reassuring clients that bankruptcy is not the end of their financial lives and that many individuals and businesses come out of bankruptcy with improved financial health. This is absolutely true and we stand by it. But it is also important for people to recognize the gravity of the… Read More »

How Long Does Bankruptcy Take?

How long the bankruptcy process takes can vary greatly from case to case and chapter to chapter. In some Chapter 7 cases, the petitioner can receive a discharge in as little as two months. Depending on what assets are present, the case may continue after the court issues a discharge as property is sold to… Read More »

Tax Liabilities and Implications with Filing Bankruptcy

Filing bankruptcy often involves tax implications, but not in the ways you might think.  Filing bankruptcy itself is not a taxable event.  However, there could be tax implications if property is sold to pay creditors, or if debts are forgiven by creditors. Typically, when you owe someone $600 or more and they cancel or forgive… Read More »

Filing Bankruptcy After Divorce Is Final

One advantage of filing bankruptcy after the divorce is completed is a shorter divorce than a divorce that proceeds concurrent with bankruptcy. Shorter divorces are generally less expensive. Recent changes from the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) made it more difficult to discharge divorce-related debts in bankruptcy. You cannot discharge any divorce-related… Read More »

Filing Bankruptcy While a Divorce Is Ongoing

With a Chapter 7 bankruptcy, the process moves rather quickly and bankruptcy closes generally within three to six months of filing. However, when you are in the middle of a divorce and decide to file bankruptcy, the automatic stay puts a stop to divorce proceedings. The only legal actions not affected by an automatic stay… Read More »

How Does the State Where You Live Affect Asset Exemption in Bankruptcy?

When filing bankruptcy, debtors list exempt assets in their schedules and Statement of Financial Affairs.  Exempt assets are not subject to liquidation to pay unsecured creditors during a Chapter 7 bankruptcy.  However, which assets are exempt during bankruptcy largely depend on state law, because state property laws determine asset exemption―unless the debtor lives in a… Read More »

What Is the Homestead Exemption?

The family home is often an individual’s or couple’s most valuable and substantial asset.  Families generally invest more money in their homes than in any other asset.  So, it stands to reason that many debtors are concerned about whether filing bankruptcy can lead to losing their home.  However, when filing a Chapter 7 liquidation bankruptcy,… Read More »